How much is too much?

I agree with the responders who ask you to imagine your feelings if you bid x and lose by a small amount. If you feel that x+10% is too much for you, or for your budget, and you imagine that you would rather not have it at that high price, don't bid over x. But, imagine if you lose at x. Will you wish you had bid a lot more? If so, bid more.

Decision-making can be continually improved by noting, before you buy any coin, how you imagine you will feel if you win it and then checking your feeling after you actually do. Did you overestimate how pleased you would be? Do you regret not buying some other coin instead with that money? Does it seem like you got a really good deal? Did you put it away the day you got it and forget about it? Pay attention to what pleases you and what does not.

Eight years may seem like a long time, but I have old paper want lists from the 1980s and 1990s (dated, so I know what I wanted most when) that have had lots of types found since then and some not yet acquired (and some I no longer care to acquire). Usually when I finally find a want-list coin after 20 years, the price is fine and I didn't have to go far higher than it used to cost. So, I doubt this will be your last chance to acquire that type. Don't pay much more than it is "worth", in your educated opinion.

 

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The concept of general Worth is one I can not grasp. The only thing that matters is worth to me. There is no plan for resale of a coin I want so it matters nothing if it is worth anything to anyone else.

I bought two coins in the last few years from a dealer I simply do not like. That hurt more than the extra cash paid but when a coin has been on a want list for decades we have to measure all sorts of worth. Neither of those two coins made it on my list of favorites. Go Figure! Now I buy coins that are overpriced and listed wants but they can't even crack the top 100. I have too many coins and too many wants. Should I only buy coins that will make it into my favorites list? Last year I added about 6 and one of them is the bubble coin that will be removed next. Buying 6 coins a year would seem like quitting the hobby.

 

A free-market capitalist will tell you that an item is worth whatever a willing buyer pays to a willing seller for that item. In the abstract, this is pretty much the only functional definition of "worth." Unfortunately, this is not much help in determining how much you're willing to bid for a coin in a competitive auction.

Of the 45 coins that comprise my current collection, 26 of them were acquired via auctions. When I was working out the maximum that I was willing to bid for any of these coins, I took all of the following into account:

1. My dealer's assessment of the condition of the coin.
2. My dealer's assessment of the market desirability of the coin.
3. Buyer's premium and (if applicable) current foreign exchange rates.
4. How likely I was to find a comparable coin within the next few years in the event that I did not win this coin.
5. How much the coin "spoke" to me.
6. Comparable sales (if available) in the last few years.

Unlike some of the other responses in this thread, my experience (at least for the coins in which I'm interested) is that coin prices generally rise moderately-to-fairly-aggressively in following years, so unless there is a plentiful supply of comparable coins currently available, I will likely pay more for a similar coin if I acquire it at a later date. This tends to make me bid more aggressively in many cases.

Ultimately, I would ask myself the question: If I'm willing to bid X, and the coin ultimately sells for 110% of X, will I regret not setting my maximum bid to the higher amount? Once I find that threshold, I'm fairly comfortable with the outcome of the auction, whatever that may be.

Hope this helps.

 

I am a huge fan of Doug's way of thinking ...

 

I'm intrigued by the concept of a coin's being worth only what it is worth to you. I don't see how anything's "worth" can be established totally in a void -- i.e., absent the existence of other external factors. Let me try to illustrate what I mean.

1. Suppose you determine that a coin you desire is worth $20 to you. So you research various dealers and find a few examples that are offered (in the condition you want) for $10. Do you pick one and give the dealer $20 since that's what it's worth to you? Of course not. You pay $10 for it, happily.

2. Continuing along these lines, suppose your research shows that this coin sells for a minimum of $50 and, over the years, has gradually increased in price from, say, $30 (at which price you still wouldn't have purchased it). Do you ever adjust your budget or do you just say to yourself "I'm not going to budge, and thus I'll never own this coin."?

3. OK, so the coin is worth only $20 to you and all the examples you can find are priced at a minimum of $50. Suddenly out of nowhere, your rich uncle gives you a birthday check for $1,000. Do you splurge and buy the coin? Or do you stubbornly refuse to pay more than it's "worth" to you? I'm guessing that you'll buy the coin for $50.

Think about it. Even when you establish what a coin is "worth to you" you're using some number of external criteria to establish that value (your current financial situation, rarity of the coin, how much the coin "speaks" to you, etc.). Especially during an auction, it's critical to take into account what a coin might be worth to other collectors.

 

I always crack up when AJ or IoM talks about "his dealer."

 

Yes, but I take Doug's post to mean there is a difference between the "market" price of a coin, and what it is worth to a specific collector. I collect Sogdian coins, and as such would most likely offer more than anyone else here for certain coins in that series. Alternately, I do not have the high grade classical ancient bug so even if our bankrolls were identical I am sure you would outbid me on most items you collect. So, even though both of us are dealing with our own budgets and the "market" we make our individual purchase decisions based upon those competing matrixes.

To go back to my original question, I most assuredly post pics if I win it. Its not a "cool" reason I want the coin like TIF usually has, its kind of a stupid reason really. Stupid or not, I still want it.

 

ahahahaha => yah, I know, eh?

=> ummm sadly (or luckily), my wife is my ultimate "dealer" ... sure, I try to pretend that I have some control over my coin-purchases, but oh my fricken God, it can go south immediately if she bothers to take a peek at my VISA stuff!!

 

For the record my rich 'Uncle Sam' often sends me a check in the Spring and I am not inclined to spend that tax refund differently that I do the other checks sent me by employers.

I buy coins like I buy lunch. I can eat at Wendy's and get a small chicken sandwich, promotional Junior Frosty and free Senior drink for a total of $1.04 including tax. I can go about twenty yards in the same parking lot and eat at a fancier place (not fancy, just fancier) where lunch will cost $10 and require I specify I want the chicken cooked through. Either way I get more fat and carbohydrates than my doctor would prefer I ate but I will be having Quinoa and Spinach for supper so I'm splurging. Neither meal will be with me in 24 hours but either will serve the purpose of keeping my stomach from growling. This is not an investment, it is an expenditure. I keep records of what I pay for coins but that number is not a major factor since the money I spent was expendable like the money spent on lunch. I do not spend money I don't have.

There are many coins I will never own. That is OK. There are many other coins I will enjoy owning. I have a certain amount of money to spend on coins so spending $50 extra on a coin I think is worth less means I will not buy another coin with that money. Will I enjoy the 100 coins on my favorites page less than I would the single aureus I might have bought with the same money? Many collectors would have none of them let alone all 100. I have no pressing desire for an aureus that means I can't have anything else but there is an aureus that last sold for $35k that, in theory, I would like. I will not be around to sell those 100 so whether a dealer would offer $10,000 or $100,000 is of no practical importance. If my heirs want to be rich, I suggest they devise another game plan than selling my coins.

 

Wow Doug => I agree 100%, my coin-friend ...

=> I actually like coins that look like they've been kicked around a bit (cool patina, a few choice knicks ... yummy, yummy!!) ... forever "mine"

 

Ever the philosopher Doug, all I know is that I want your fourees (That was a derp, forgive me oh spelling police!).

 

This goes off on a tangent, but I wonder to what degree we buy coins out of habit more than anything else. This is not to say we don't love the coins we buy, but when think about a 'dream coin' or even a whole category of coins (Greek tetradrachms for example) as being out of our budget, is it simply because we've developed a habit of buying X coins a year rather than X/10 or even X/100 coins? By making ourselves collectors, we've naturally developed an appetite to collect and acquire. But if we could control that appetite, think of what could be accomplished...

If I were to squish my next coin buying itch (and the next, and the next...) and buy 1 coin a year rather than 100, would that be a case of quitting the hobby, or just quitting a habit. Let's not say 1 coin a year because that would be inhumane, but a few coins... my budget for those few coins would be dramatically different from what I usually buy, and I think it would follow that the coins on my want list, and what I cast my eye on when I go coin shopping would change accordingly. Come to me, my dream coins!

The idea is seductive enough for me to try this out for the next year and see what happens. And hey, actually I think I'll just take it abit further because there's a coin I REALLY would like to have... so folks, wait for my thread on my Colosseum sestertius acquisition in oh, 2035 or thereabouts.

Who's with me?

 

I guess I'm with you, I haven't bought a coin in four months...

 

I buy coins the same way the "pawn stars" or "american pickers" build their inventory and I never go wrong. I buy any coins I find shops or dealers selling way less than their true value. The best and rarest continue on in my personal collection, the rest resale and pay more than I spent overall. Every year my collection grows and I don't spend a dollar out of pocket. "It's only the right coin for me if I'm getting it at the " right " price.

 

2035 is closer than it may seem! Perhaps wait until after 2038 when the next "Y2K" hits (and this one will be more than the fizzle of the last due to the proliferation of 32bit software: Year 2038)

I too have followed the mentality of making larger acquisitions rather than needing to buy X coins per month. While I have been adding an unusually high number of coins recently, I've had several periods of 3+ months with no new coins and could easily go longer without feeling as if I've left the hobby.

Much of the thrill is in the chase but the longevity of desire comes from context and learning so I tend to fill the time between acquisitions with reading history books and old catalogs.

I've been fortunate to have acquired several of my most significant coins in the last 12 months - my Eid Mar, Colosseum sestertius, and Port of Ostia sestertius were the top three coins on my wantlist. I still have a number of pieces I'm looking for but I feel more relaxed now, not having to worry about the types appreciating in value to a point where they become unattainable for me. There's always an opportunity cost: had I purchased a number of less expensive coins in the meantime, I may have not been able to afford these.

 

I agree that habit is a large part of the matter but my habit requires being open to a purchase at any time. The part that would seem like quitting would be not being able to buy the coin of all coins when it turned up because I had blown the budget for the year on the last purchase. I have three coin shows in the next three months. Averages suggest I will buy 10-20 coins at each. June, July and August each saw me buy three coins. My hobby habit would be significantly changed if I had to skip those three shows. It is not the purchase as much as it is the chase but I doubt I would feel like looking if I knew I was not buying whatever I saw at those shows.

 

Great thread. I believe the answer is relatively simple and resembles going to a Casino vs. allocating some of your savings towards this as a hobby and/or asset allocation. If you are OK with losing a significant/entire amount in return for an enjoyable experience, then pay what it is worth to you without much research. I would then keep it to smaller amounts, as one would do in a Casino. For me personally, its a combination - I buy far fewer coins in total, yet do try to get them as nice as I can within a known competitive market. I research and purchase (or try to) based on the subjective assessment given the price band. From this point I ask myself "If the market were to drop by 50%, will I still be OK with the financial loss relative to the enjoyment in having such a piece of history" - if the answer is yes, it's a go.

 

If it's the first one in 6 years, my concern would be if it will be 6 years before the next one becomes available. My own experience with world coins is that if a scarce coin sells for way more than what had been assumed to be the prevailing rate for the coin, then multiple examples seem to crawl out of the woodwork looking for buyers at similar prices. I think we might see that with the 1923 Egypt (Fuad) silver 20 Piastres, quite common in circulated grades the coin is nearly impossible in UNC, yet an MS64 and an MS63 have both crossed the auction block in the last 3 months for about $1,500 which may well suck a few more out into the open.

 

This is great advice. To this I would add that I could also spend more time photographing, studying and researching even the 'lesser' coins in my collection and thereby deepen my appreciation for them as well as ancients in general.

 

FOUR months? Buy a coin already, man!